Ashley Marie Luna v. Lucio Manuel Luna-Cervantes ( 2022 )

RENDERED: OCTOBER 7, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-0862-MR
ASHLEY MARIE LUNA APPELLANT
APPEAL FROM CALLOWAY CIRCUIT COURT
v. HONORABLE STEPHANIE J. PERLOW, JUDGE
ACTION NO. 20-CI-00267
LUCIO MANUEL LUNA-
CERVANTES APPELLEE
OPINION
VACATING AND REMANDING
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BEFORE: CALDWELL, TAYLOR, AND L. THOMPSON, JUDGES.
CALDWELL, JUDGE: Ashley Marie Luna (hereinafter “mother”) appeals from
the Calloway Family Court’s denial of her motion for reconsideration of the
allocation of the tax exemption for the minor child she shares with Lucio Manuel
Luna-Cervantes (hereinafter “father”). We vacate and remand.
FACTS
The Calloway Family Court entered a decree of dissolution of
marriage granting the mother the primary physical custody of the minor child of
the parties. The father, who had not seen the child for approximately six months at
the time of the entry of dissolution, was granted visitation. Additionally, the
mother was granted the ability to claim the tax exemption for the child on her taxes
in even years, the father in odd years.
Following the entry of the dissolution order, the mother moved for
modification, arguing that the court abused its discretion in granting the father the
ability to claim the child on his taxes in odd years as she was granted physical
custody of the child and the IRS1 Code provides the custodian of the child shall
have the right to claim the child. The trial court denied her motion, and she
appeals. We vacate and remand this matter back to the trial court. The trial court
shall conduct an evidentiary hearing and make written findings of fact and
conclusions of law regarding the issue of which parent shall claim tax exemption
for the minor child and how that benefits the minor child.
STANDARD OF REVIEW
We review the decision of a family court in assigning a child tax
exemption for an abuse of discretion. “Discretion, even in determining equity, or
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Internal Revenue Service.
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best interests, must have a reasonable and meaningful basis if we are not to
undermine the integrity of judicial decisions and thereby erode public faith in the
judiciary.” Adams-Smyrichinsky v. Smyrichinsky, 467 S.W.3d 767, 784 (Ky.
2015).
ANALYSIS
The sole issue for our review in this matter is the family court’s denial
of the mother’s motion for a modification of that portion of the court’s order which
granted the father the right to claim the child on his taxes in odd years, despite the
fact that the mother was granted primary physical custody.
We note that the father failed to file a brief in this matter. Kentucky
Rule of Civil Procedure (“CR”) 76.12(8)(c) provides the following remedies to the
Court when a party fails to file a brief: “(i) accept the appellant’s statement of the
facts and issues as correct; (ii) reverse the judgment if appellant’s brief reasonably
appears to sustain such action; or (iii) regard the appellee’s failure as a confession
of error and reverse the judgment without considering the merits of the case.”
First, we note that we are not compelled to select one of these options but may do
so. “The decision as to how to proceed in imposing such penalties is a matter
committed to our discretion.” Roberts v. Bucci, 218 S.W.3d 395, 396 (Ky. App.
2007). We will accept the mother’s statement of facts as correct, as supported by
the findings of the family court and the record on appeal. “Where those facts
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conflict with findings of fact by the trial court, however, we may accept them only
where we can say that the trial court’s findings are clearly erroneous.” Whicker v.
Whicker, 711 S.W.2d 857, 858 (Ky. App. 1986).
Typically, and under the Internal Revenue Code,2 it is the parent with
primary physical custody of the child who is considered the custodial parent and
has the right to the exemption. Of course, the parties can agree to a modification
of this scheme, but a court must take caution when granting a noncustodial parent
the right to the exemption.
In Adams-Smyrichinsky v. Smyrichinsky, 467 S.W.3d
767, 783 (Ky. 2015), our Supreme Court cautioned that
the allocation of a federal tax exemption is not a matter
solely within the discretion of the trial court but is subject
to Internal Revenue Code and accompanying regulations.
Id. at 781-82. Consequently, a trial court must do more
than simply look to which parent has the highest income,
or divide the exemptions, or direct the parties to take the
exemption in alternate years. Id. at 784.
Nevertheless, the Court also recognized that
Kentucky courts retain the discretion to allocate the tax
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See 26 [United States Code (U.S.C.)] § 152(e) (assigning
exemption to “custodial” parent); 26 [Code of Federal Regulations
(C.F.R.)] § 1.152-4 (“The custodial parent is the parent with whom
the child resides for the greater number of nights during the
calendar year, and the noncustodial parent is the parent who is not
the custodial parent.”). Those provisions, however, allow the
“noncustodial” parent to receive the exemption if the “custodial
parent” signs a written waiver declining to claim the exemption.
26 U.S.C. § 152(e)(2).
Adams-Smyrichinsky, 467 S.W.3d at 781-82 (footnote omitted).
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exemption based upon a finding that it would be in the
best interest of the child. Id. at 783. So long as a trial
court can articulate a sound reason why awarding the
exemption to the noncustodial parent actually benefits the
child, an appellate court generally will not disturb the
trial court’s discretion. Id. at 783-84. In this case, the
DRC [Domestic Relations Commissioner] noted that the
Internal Revenue Code and regulations generally assign
the exemption to the parent with whom the child resides
for the greater number of nights in the calendar year.
Citing 26 U.S.C. § 152(e)(4)(A); 26 C.F.R. § 1.152-4.
But as the DRC noted, these rules are not inflexible.
Keith v. Keith, 556 S.W.3d 10, 16 (Ky. App. 2018) (footnotes omitted).
In the present case, the family court cited no reason for so allocating.
It should be clear that assigning a federal tax
exemption to a party who is not entitled to it under the
Internal Revenue Code, or even when the court does not
know who is entitled, cannot be taken lightly, if for no
other reason than that the Supremacy Clause applies, and
courts in good faith should recognize this. Indeed, this is
why a minority of jurisdictions have held that the
exemption cannot be allocated by a court.
Adams-Smyrichinsky, 467 S.W.3d at 783. The sole reason provided in the order
for granting the father the exemption in odd-numbered years was the fact that the
child would be spending visitation periods with the father. Such is simply
insufficient to conclude that the child would benefit from the grant of the
exemption to the father, particularly when the father is not in the country for long
periods of time so as to enjoy visitation with the child. On remand, the family
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court should be guided by our holding in Keith, supra, and articulate a reason for
why awarding the exemption to the father actually benefits the child.
CONCLUSION
We vacate the order of the family court denying the mother’s motion
for modification of that portion of the order relating to the child tax exemption and
remand this matter for proceedings consistent with this Opinion. In any
forthcoming order, the family court should provide facts sufficient to support its
justification for not granting the custodial parent the tax exemption on an annual
basis.
ALL CONCUR.
BRIEF FOR APPELLANT: NO BRIEF FILED FOR APPELLEE.
Allison S. Whitledge
Rebecca P. Biehslich
Fulton, Kentucky
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